Seagate Surges on Preliminary Earnings

NEW YORK ( TheStreet) - Shares of Seagate Technology ( STX) moved sharply higher after the company gave strong preliminary second-quarter results, and robust third quarter guidance.

During the fiscal second quarter of 2012, Seagate said it expects preliminary revenues to be between $3.1 billion and $3.2 billion, as it shipped approximately 47 million disk drives.

Seagate gave strong preliminary results after market close on Wednesday.

Wall Street analysts polled by Thomson Reuters expect revenue of $2.81 billion and 70 cents per share in earnings. Seagate said it expects gross margins of at least 30.5%, well above the 28.1% Wall Street analysts expect. The company ended the second quarter with more than $2.1 billion in cash and cash equivalents.

Seagate also gave third-quarter revenue guidance above analysts' estimates. Seagate said it expects third-quarter revenues between $4.2 billion and $4.5 billion, with gross margins of at least 33%. The average analyst estimate from Thomson Reuters is $3.77 billion and a gross margin of 29.4%.

"The better than expected results for the December quarter are attributed to the company's outstanding operational performance and overall strong execution," said Steve Luczo, Seagate CEO and chairman, in a press release.

Luczo said that, despite significant supply chain disruptions, the company was able to deliver strong quarterly results. The industry is currently experiencing a shortage of hard drives caused by the flooding in Thailand.

Shares are sharply higher in after-hours trading, up 6.4% to $17.89 on over 100,000 shares, according to NASDAQ.com.